In afternoon trade the Australia and New Zealand Banking Group (ASX: ANZ) share price is on course to finish the week on a positive note.
At the time of writing the banking giant’s shares are up 0.5% to $28.21 despite news that it has been hit with civil penalty proceedings.
This afternoon ANZ Bank advised that the Australian Securities and Investments Commission (ASIC) has advised the bank that it has commenced civil penalty proceedings against it for failing to comply with its continuous disclosure obligations.
According to the release, the proceedings relate to an underwritten institutional share placement in August 2015 that is the subject of separate proceedings by the Australian Competition and Consumer Commission.
ASIC alleges that ANZ should have advised the market that the joint lead managers took up approximately 25.5 million shares of the placement. The bank has stated that it will defend these allegations.
In addition to this, the bank advised that the shares in question represented less than 1% of the shares on issue at the time and were taken up by the joint lead managers in circumstances where the book indicated the placement was covered at 103%.
It also added that it was not aware of a precedent for a listed entity to disclose the take up of shares by underwriters in an equity placement.
ANZ chief risk officer Kevin Corbally said: “ANZ’s disclosure in relation to the placement was in accordance with its ASX disclosure obligations as well as market practice and we are defending the matter.”
Should you sell your shares?
It certainly has been an eventful month for the banks in respect to legal action. Slater & Gordon Limited (ASX: SGH) is going after the banks with its Get Your Super Back campaign, National Australia Bank Ltd (ASX: NAB) has been targeted by ASIC due to the fees for no service scandal, and now this development.
However, despite this, I wouldn’t be in a rush to sell my bank shares as I think the market has priced in these events already. Instead, I would sooner be buying the banks than selling them at these levels.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.